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DECISION No

DECISION No. 1419/QD-TTg OF NOVEMBER 1, 2001 APPROVING THE PROJECT ON THE DEVELOPMENT OF VIETNAM NATIONAL SHIPPING LINES IN THE 2001-2005 PERIOD AND ORIENTATIONS TOWARDS 2010

THE PRIME MINISTER

Pursuant to the Law on Organization of the Government of September 30, 1992;

Considering the Project on the development of Vietnam National Shipping Lines in the "2001-2005" five-year period and orientations towards 2010 (Reports No. 127/KHDT of February 28, 2000; No. 652/KHDT of July 26, 2001; No. 783/KHDT of August 25, 2001 of Vietnam National Shipping Lines and Report No. 3115/GTVT-KHDT of September 19, 2001 of the Ministry of Communications and Transport);

Pursuant to the opinions of the ministries and branches at the August 2, 2001 meeting,

DECIDES:

Article 1.- To approve the Project on the development of Vietnam National Shipping Lines in the 2001-2005 period with the following major contents:

1. On objectives:

Vietnam National Shipping Lines shall focus on mobilizing capital from different sources for investment, renovation and fast and steady development of shipping flotillas and seaport systems; organize the synchronous application of advanced technologies to maritime transportation, loading-unloading and services in order to raise the business efficiency and meet the domestic transportation requirements, and at the same time, expand activities, increase maritime service export market share and turnover on the regional market; strive to make Vietnam National Shipping Lines a medium-sized maritime consortium in the region by 2010.

2. On business scale and capacity:

- Shipping flotillas: To continue developing the shipping flotillas so as to reach the total tonnage of 1.5 million tons in 2005, with the ships� average age being under 15 years, ensuring the transportation of 80% of goods volume subject to inland maritime transportation and 25% of goods volume exported and imported by sea in the whole country, with:

+ 40% of export goods volume transported by containers.

+ 30% of export rice volume;

+ 20% of export coal volume;

+ 10 -15% of import fuel volume;

+ 20% of import fertilizer volume.

- Seaport system: To continue making intensive investment in and renovating technologies for the existing ports, to build Vung Tau container port and to participate in the exploitation of new ports in order to achieve the total cargo handling capacity of 32 million tons/year and the productivity of 3,500 tons per one meter of berth/year in 2005.

- Service enterprise sector: To strive for the target that, by 2005, the shipping flotillas and service system shall participate in the regional maritime market with 30% of their capacity.

3. Development investment plan:

a) Shipping flotillas:

To focus on developing special-use and modern shipping flotillas, supplementing 75 vessels, equivalent to 938,000 DWT, of which 32 vessels, equivalent to 336,000 DWT, shall be domestically built and 43 vessels, equivalent to 602,000 DWT shall be purchased from foreign countries.

The detailed annual plan on the building and purchase of ships shall comply with Appendix I.

b) Sea-port system:

- To complete the projects on development and expansion of Da Nang port and Hai Phong port (step 1 of phase II) capital loans borrowed from JBIC - Japan.

- To study and invest in the construction of the following ports with self-mobilized and borrowed capital sources:

+ Vung Tau container port (Sao Mai - Ben Dinh)

+ Two wharves for vessels of 20,000 DWT in Dinh Vu - Hai Phong

+ General wharf No. 2 of Dung Quat port.

- To continue making intensive investment in the existing ports and participate in the equipment investment so as to take initiative in fruitfully exploiting new ports.

-To continue building and finishing the construction of dry docks in Gia Lam, North Thang Long and Dong Nai; and at the same time, to study the construction of dry docks in other key economic regions in order to serve the distribution of goods and apply "multi-modal transport" technology, contributing to raising the efficiency of business activities and exploitation of the national communications and transport network.

The detailed plan on the investment in and development of ports shall comply with Appendix II.

c) Maritime service system:

- To strive to complete the restructuring and equitization of maritime service enterprises by 2003; and at the same time, to research into the establishment of maritime service enterprises in large ports in foreign countries to serve the exportation of transportation services and crew members.

d) On science and technology:

- To strive to reach ISO 9001-2000 quality control system�s standards set for transport and service enterprises by 2003.

- To complete the implementation of the "Maritime Safety Management Code" (ISM) and the "Convention on the training and standing-by of, as well as certificate granting to, crew members" (STCW 95) by shipping and crews exporting enterprises in 2002.

- To deploy the application of a "uniform accounting software" for enterprises and the whole corporation in 2003.

e) On the organization of business and production activities:

- To focus on implementing the Prime Minister�s Decision No. 512/QD-TTg of April 26, 2001 on experimenting the form of corporations contributing capital to member enterprises, ensuring that by 2003, Vietnam National Shipping Lines shall operate under the model of "parent company-subsidiary company".

- To restructure and equitize maritime service enterprises; to study the establishment of maritime service enterprises in foreign countries so as to reach the set objectives.

- To continue studying, suggesting and providing container transit service at suitable seaports.

4. Investment capital demand:

The total investment capital for the development of Vietnam National Shipping Lines in the 2001-2005 period is estimated at VND 10,449 billion and USD 226 million, of which:

- Investment capital for development of shipping flotillas: About VND 5,120 billion and USD 226 million.

- Investment capital for development of ports and maritime services: About VND 5,329 billion.

Article 2.-

1. Projects on building vessels at home may borrow capital from the Development Assistance Fund as prescribed in the Prime Minister�s Decision No. 117/2000/QD-TTg of October 10, 2000.

2. Vietnam National Shipping Lines shall be given priority in using ODA loans for projects on development of sea-port infrastructure.

Article 3.-

1. Responsibility of the Ministry of Communications and Transport:

- To approve and direct the implementation of the annual plans on domestic ship building and overseas purchase of ships from overseas so that Vietnam National Shipping Lines and Vietnam Shipbuilding Corporation take initiative in their business and development investment activities.

- To assume the prime responsibility and coordinate with the Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Trade, and goods-exporting enterprises in studying for promulgation or submission to the Prime Minister for promulgation mechanism and policies to encourage Vietnamese exporting/importing enterprises to use Vietnamese shipping and insurance services.

2. Vietnam National Shipping Lines shall coordinate with Vietnam Coal Corporation, Vietnam Petroleum Corporation, Vietnam Cement Corporation, Vietnam Insurance Corporation and Food Corporations in:

- Studying and suggesting solutions to perfect mechanisms and polices, thus encouraging the improvement of the capacity of Vietnam�s shipping flotillas, in compatibility with renewal requirements, international practices as well as process of integration into the regional economy.

- Finding out solutions to stabilize sources of cargo, determine suitable modes for cooperation at home and abroad in order to create sources of cargo for transportation.

3. The Ministry of Communications and Transport and Vietnam National Shipping Lines shall have to take initiative in coordinating with the provincial/municipal People�s Committees in directing and managing maritime service enterprises based in their respective localities, so as to well manage the shipping market and gain common economic efficiency for the country.

Article 4.- The Ministers of Planning and Investment; Finance; Trade; Communications and Transport; Industry; Agriculture and Rural Development; as well as Science, Technology and Environment, the Vietnam State Bank Governor, the heads of the agencies attached to the Government, the presidents of the provincial/municipal People�s Committees, the chairman of the Management Boards and the general directors of Vietnam National Shipping Lines and other relevant corporations shall have to implement this Decision.

For the Prime Minister

Deputy Prime Minister
NGUYEN TAN DUNG

APPENDIX I

PLAN ON DEVELOPMENT OF SHIPPING FLOTILLAS IN THE 2001-2005 PERIOD

(Issued together with the Prime Minister�s Decision No. 1419/QD-TTg of November 1, 2001)

APPENDIX I

PLAN ON DEVELOPMENT OF SHIPPING FLOTILLAS IN THE 2001-2005 PERIOD

(Issued together with the Prime Minister�s Decision No. 1419/QD-TTg of November 1, 2001)

Demand

Capacity of building

Operating vessels to

Phased-out investment

Ordinal number

Types of vessel

for vessels

vessels at home

be purchased

2001

2002

2003

2004

2005

For

substi-

tution

Further

deve-lopment

Total

Vessels

DWT

Vessels

DWT

Built

Bought

Built

Bought

Built

Bought

Built

Bought

Built

Bought

1

Up to 4,000 DWT

04

-

04

04

16,000

-

-

-

-

02

-

02

-

-

-

-

-

2

From 6,500 to 8,000 DWT

05

13

18

10

65,000

08

52,000

-

04

03

02

03

02

02

-

02

-

3

From 8,000 to 12,000 DWT

11

-

11

-

-

11

90,000

-

-

-

03

-

03

-

03

-

02

4

From 12,000 to 15,000 DWT

09

01

10

08

100,000

02

25,000

-

-

-

01

02

01

03

-

03

-

5

From 15,000 to 20,000 DWT

-

10

10

08

120,000

02

30,000

-

-

-

01

-

01

04

-

04

-

6

Over 20,000 DWT

01

04

05

-

-

05

100,000

-

-

-

01

-

02

-

01

-

01

7

Container vessels

- Of a kind of over 1,000 TEU

-

06

06

-

-

06

90,000

-

02

-

02

-

02

-

-

-

-

- Of 1,500 TEU

-

04

04

02

35,000

02

35,000

-

-

01

-

01

01

-

01

-

- Of 2,000 TEU

-

02

02

-

-

02

40,000

-

-

-

02

-

-

-

-

-

-

- Of 2,500 TEU

-

02

02

-

-

02

50,000

-

-

-

-

-

-

-

02

-

-

8

Oil tanker

- Of 30,000 DWT

-

03

03

-

-

03

90,000

-

-

01

-

-

-

01

-

01

Total number of vessels

30

45

75

32

43

-

06

05

14

07

12

10

07

10

04

Total weight tonnage (DWT)

321,000

336,000

602,000

APPENDIX II

PLAN ON INVESTMENT IN THE DEVELOPMENT OF SEA-PORT SYSTEM

IN THE 2001-2005 PERIOD

(Issued together with the Prime Minister�s Decision No. 1419/QD-TTg of November 1, 2001)

Unit: Billion Vietnam dong

Project

2001-2005 plan

Estimated cost

1. Hai Phong seaport

Phase II (Step 1)

(Dredging channel and building two container wharves)

(Capital borrowed from JBIC and reciprocal capital)

2. Da Nang seaport

- Building a break wall of 250 m and upgrading Tien Sa 1 and 2 berths; dredging channel and building a ship U-turn bay of 900,000 m3, building a container yard of 40,000 m2 and support projects (JBIC capital and reciprocal capital)

- Restoring Han River port�s berth

3. Can Tho port

- Building berth and acquiring loading-unloading equipment

4. Vung Tau container- transshipment port (Ben Dinh - Sao Mai)

- Wharves, yards and infrastructure projects

- Equipment

5. Dry docks:

- North Thang Long

- Co Bi (Gia Lam)

- Yard of a capacity of 500,000 TEU/year

6. Dinh Vu container port (Hai Phong)

- Two wharves for vessels of 20,000 DWT

- Ben Got transshipment wharf

7. Dung Quat port

- Wharves, yards and infrastructure

8. Other projects

+ Cai Lam temporary wharf

+ Khuyen Luong port

+ Hanoi International Maritime Trade Information Center

Total

5,329.1